What’s causing today’s oil price hike?

What’s causing today’s oil price hike?

Oil prices rose by 4% today, following news that oil supply coming from Libya and Brazil may decrease, at least temporarily. Libya’s oil production is expected to drop by about 70K barrels per day to less than 400,000 barrels a day after the Eastern export terminal of Zueitina was blocked by an armed militia, a spokesman for Libya’s National Oil Co. said Tuesday. Oil production in Libya has recently suffered due to armed conflicts between rival governments and attacks by the radical Islamic State.

Another factor in today’s rising oil ptices is Brazil’s biggest oil-sector union going on strike. The union includes workers on oil platforms.

A rally in U.S. gasoline and diesel added support to oil market, too.

“If you look at the supply situation, the bigger picture is bearish. But the price action suggests the path of least resistance is higher for now,” said Scott Shelton, oil broker and commodities specialist at ICAP in Durham, North Carolina.

“From a technical point of view, both oil contracts are displaying bullish characteristics, although neither has yet to make a decisive breakthrough,” said Fawad Razaqzada, analyst at forex.com. He pegged resistance for Brent at between $51 and $52 and for U.S. crude at above $48.50.